Get ready for a mobile future
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Get ready for a mobile future

An explosion is underway in the number and type of mobile payments around the world, according to research. Simon Newstead, Managing Director of Market and Business Strategy at RBS, says it's vital that businesses react to this trend, but they should carefully consider all the options.

By Simon Newstead,
managing director of market and business strategy

There is a meteoric rise underway in mobile payments. The use of a range of devices and methods to ensure greater efficiency in making and receiving payments is an unstoppable trend, and companies that ignore it will get left behind. But businesses need to take a good look at what’s available and carefully assess their needs, and those of their clients, before deciding on their mobile payments strategy.

Research carried out for this year’s World Payments Report revealed significant growth potential for payments using mobile devices. They are rising faster than initially expected – predicted to rise 53 per cent from 2011 to 2013 – but so far these payments are made by only 2 per cent of all mobile users, so the potential for further growth is clear.

We are on the cusp of change and, while it is clear that mobile payments are here to stay, we don’t yet know exactly which applications and solutions will prove to be the winners in the longer term, and in which markets.

So businesses need to ensure they use the right mix of mobile and electronic payment methods, but also consider which products, partners and service providers to use for each one.

Customer demand for immediate, real-time information is one of the drivers behind the current level of innovation. With treasurers increasingly using their smart phones or tablets to make purchases and manage their finances while on the move in their personal lives, many want to use the same devices to authorise payments or check balances for business purposes.

Meanwhile, in developing economies, the growth in mobile payments is driven by the many consumers who do not have a bank account or access to a traditional banking infrastructure, but can access payment services through mobile devices.

Alongside this growth, there is a plethora of different types of transaction operating under the overall banner of ‘mobile payments’ – meeting a wide range of needs. Examples include using smart phones to initiate traditional credit transfers, text-based payment services and Near Field Communication (NFC)-enabled e-wallets.

All companies involved in payments – as providers or users – need to pay close attention to these emerging payment methods and stay on top of the innovations. And that doesn’t just go for mobile payments because they are not the only significant growth area.

Electronic or online payments are rising steadily too, with volumes forecast to reach 31.4 billion globally by 2013, after sustained growth of 20 per cent a year since 2009. Meanwhile, cards continue to be the single biggest driver of global cashless payment volumes – accounting for some 60 per cent of the total.

The use of debit cards in particular is on the increase, accounting for more than one in three non-cash payments in 2010. These cards are benefiting from various trends including a tightening of credit standards for credit card users in some countries, and consumers increasingly using debit cards for small-value transactions.

After years of using technology to drive internal improvements for more efficient and cost-effective back office operations, banks and businesses are now focusing even more on placing innovation at the heart of their client-facing activities.

Now is the time for them to think carefully about what they need in the fast-moving world of mobile payments and related innovations.

They need to consider all the options, see where their own strengths are and investigate where they may need to partner with other organisations. Only then can they make sure they are doing what’s right for their clients and themselves.

Much of this information is taken from the World Payments Report 2012, launched last month. It explores the state and evolution of global non-cash payments. To see a copy of the report, produced by Capgemini, The Royal Bank of Scotland (RBS) and Efma, visit 

For more RBS Insight content, click here


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